In February Google made an announcement in regards to how the search engine results pages would be changed with the removal of the AdWords sidebar ads. Due to the AdWords sidebar changes, heads started spinning, how would it affect advertisers, more importantly, how would it affect the impressions, cost-per-clicks, average position, and click through rates. Naturally, when you have more inventory for sale in a typical ecosystem and remove supply, costs would increase for the remaining.
The actual AdWords sidebar changes have a bit more detail. There would be no text ads on the right sidebar of the search results on the desktop. Also, the three ads above the organic results would show four ads for queries that are highly commercialized, which is what Google believes is a high intent to purchase. Three text ads will show below the organic results. Now if we add this up, the maximum amount of ads showing up in the SERP would go from 11 to 7, a 36% reduction of ad space by a total number of ads, but not as much of a reduction when going by display pixels. Product ads from Google Merchant Center and knowledge panels would continue to show to the “right rail,” also known as the sidebar.
Many utilizing AdWords ads believe the AdWords sidebar changes will equal an increase in CPCs. This would hold especially true for those who are bidding for a particular position. Also, from Google’s standpoint, one would think less inventory mean that they may take a hit when it comes to AdWords revenues?
Early AdWords Sidebar Changes Fallout Signs
Early signs from reputable third-party advocates have pointed out that impressions and clicks rose for their ads, assumedly for those with ads on the first page. The Ignition One report shows that in the first quarter of 2016, U.S. search marketing budgets declined for the first time in over six years. Mobile impressions, where impressions rose 73%, and clicks rose 86% YoY continued to grow. Overall impressions were up by the biggest amount in three years, 19% year over year and clicks increased 15%. Programmatic display ads was another winner, with ad budgets rising 10% in the first quarter YoY. Facebook saw 51% growth in programmatic display ads while Google dropped 10% YoY. The report also noted that remarketing ads were down year over year but remained at 41% of their search marketing budget. Across industries, it seems that the spend ebb and flow increased and decreased according to how an industry fared in the overall economy. Despite all of this, one will have to wait and see from Alphabet Inc.’s upcoming earnings report after the market close on 4/21/2016 to see how things have affected the 800 lb. gorilla.
Tips To Overcome the AdWords Sidebar Changes
There are some things to take from the AdWords sidebar changes that can help advertisers. One thing that will grow is CRO, conversion rate optimization, and ad testing. Another will be those who have a good method to bidding and set limits to their cost per lead and cost per acquisition. Position #4 is now relevant since it is above the fold and above organic results, however, it may taper off over time as more and more people figure out that that 4th spot is now an ad and not an organic result. Those search marketers who focused on positions 5-11 are going to have to do some re-thinking, as their ads may fall off the first page, and if they have thin margins, then they may need to advertise elsewhere. The Google AdWords sidebar changes will certainly affect marketers for the foreseeable future.